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Dealing with a Tax Determination

All around the world different countries use a taxation method to gain money to help run the government and to help with other community activities. In the United Kingdom the system of taxation is known as Self Assessment and the citizens of the country are required to fill out and file a tax return. These tax returns give the government information on citizen’s income, and costs to determine how much tax they owe. Unfortunately, many people do not file a tax return. Whether this is out of ignorance, oversight, or fraud, many tax returns are not filed when they should have been.

Many times people have no income tax to report. This could be because they were sick or did not work. Regardless of whether or not people made money through the year, they need to file a tax return. It is a misconception that just because they didn’t work they do not have to file. Sometimes the government demands a tax return, and when this happens the paperwork should be filed and submitted as soon as possible.

  • The HM Revenue & Customs (HMRC) in the United Kingdom is responsible for all of the tax returns that are filed in the United Kingdom. They are the ones that go through the tax returns each year and find the ones that have not been filed based on information they receive about who is registered and living in the country. When they find a tax return that was not filed but should have been, they will send out a tax demand to the person who needs to file. The tax demand includes an estimated amount of what they should pay, and this number is based on previous returns that are filed over the years. The HMRC also has the right to access other information about your finances, so they are aware of how much money you earned based on reports filed by your employers.

    The estimation of the taxes that are due to the government is known as a tax determination and they can be considerably higher than the amount you actually owe the government. This is one of the reasons why everyone is encouraged to file a return. The last thing anyone wants is to have to pay more than what they owe. If a tax determination is made, tax collectors for the government have the rights to pursue you for repayment of the amount even if you do not agree with the figure that was on the tax determination.
Anyone who receives a tax determination notice should not panic. These documents are not set in stone, and as long as the missing tax return is filed and the account brought up to date with the government the tax determination can be recalculated to the proper amount. You could still be liable for any fines and interest charges even if you pay the determination off in full if you do not submit the missing tax returns. You should get in touch with the HMRC as soon as possible even if you have submitted your tax returns. They will help you arrange payments on the tax determination to avoid recovery actions and until the amount you actually owe is finalised by the HMRC.
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